School for Rich Kids Isn’t Charity

Grace Church, New York City (cc photo by Barbara Hanson)
Felix Salmon raises a long-time bugaboo of mine—the madness of giving private schools the same tax status as charities. It’s true, of course, that someplace like the schools I was sent to aren’t for-profit businesses. But they’re certainly not charities. And as best one can tell, their main impact on the common weal is negative, drawing parents with resources and social capital out of the public school system and contributing to its neglect.
You’d have to believe that New York City’s public schools would be both better funded and free of this kind of nonsense if a larger portion of the city’s elite were sending their kids to them. Arguably private school tuition ought to actually be taxed, but at a minimum for your donations to a school to count as charitable they school ought to be made to demonstrate that it’s providing a service to people in need (as many Catholic schools are) and not just to the small number of families who can afford the tuition. Gossip Girl is fun, but not in need of large implicit tax subsidies.

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Rob Reich is worried about school inequality. (Longer, more fun version here.) When it comes to education, as in so many other fields, the rich just get richer, leaving everybody else behind. His Exhibit A: the parents of wealthy Hillsborough, California, who between them donate some $2,300 per child per year — all of it fully tax-deductible — to supplement the money coming from the state.

Parents at Christian schools across the country could suddenly face bills for back taxes and a hike in school fees after the Canada Revenue Agency ruled that a charity-run program that helps students attend independent religious schools is “merely a tax scheme” designed to mask tuition payments as grants.
The federal tax agency said in a letter this month donations to the Christian Economic Assistance Foundation made in 2009 and 2010 would be denied because they do not qualify as “gifts” under the Income Tax Act.

When Leonard Baak’s son hit kindergarten age, his local public school in Stittsville, Ont., was so full it couldn’t even add any portables. So all the other parents in his neighbourhood did the natural thing and dusted off their Roman Catholic baptism certificates and got their children into the local Catholic school.

Back in 2011, I wrote a TIME cover story on declining social mobility and growing inequality in the United States. The title: “Can You Still Move Up in America?.” My answer back then: “not as easily as in the past.” For some time now, we’ve seen rising inequality in the U.S. And as a result, social mobility has been declining, particularly respective to many of our peer nations.

Back in 2011, I wrote a TIME cover story on declining social mobility and growing inequality in the United States. The title: “Can You Still Move Up in America?.” My answer back then: “not as easily as in the past.” For some time now, we’ve seen rising inequality in the U.S. And as a result, social mobility has been declining, particularly respective to many of our peer nations.

Should public schools have charitable status? There’s a paradox here - the people who should favour such status actually oppose it, whilst those who should oppose it actually support it.To see what I mean, bear in mind that the case for charitable status is not that private schools save the tax-payer money. If this were the argument for treating public schools as charities, we’d also regard private health insurance, or private security guards, as charities. But we don’t.

We can explain human behavior on many levels. For example, we can explain a specific choice in terms of that person’s thoughts and feelings at the time. Or we can explain typical patterns of individual behavior in terms of their stable preferences, resources, abilities, and a rough social equilibrium in which people find themselves. Or one can try to explain why different social worlds find themselves in different local equilibria.

MONTREAL — Some private English-language schools in Montreal are so frustrated with Quebec’s language law regarding student admission they are considering refusing an annual government subsidy and going entirely private.
That would allow private English schools to bypass Bill 101 — Quebec’s language law — and give them a larger applicant pool to choose from, including the richest francophone students.

Charter Schools are drawing promoters from a place you might not think of: Walmart. The Walton Family Foundation — the philanthropic group run by the Walmart family — sponsored a symposium at the Harvard Club for investors interested in the charter school sector, last week.